Don't Bet Against this Bull
by Jerome "Mel" Hickerson
Before the open, initial claims for unemployment insurance for the week ending April 17th fell by 24Kto 456K, which was above the expectations for a reading of 450K. Continuing Claims for unemployment for the week ending April 10th were above consensus at 4.646M vs. expectations for 4.60M. The Labor Department reported the Producer Price Index for March rose by +0.7%, which was above the consensus estimate for an increase of +0.5% and February’s reading of -0.6%. The Core PPI came in up +0.1%, in line with the consensus for +0.1% (and January’s +0.1%). On a year-over-year level, the March increase was a bit above expectations to 5.8%. The major overseas markets were lower on worries over sovereign debt. Futures pointed to a weak open.
The session opened with a large gap down, continued to work itself downward for all of 15 minutes before putting the low of the day on the chart. The SPX then rallied sharply until 10:48 before teasing the bears with a decline that lasted about an hour. But from noon until 4:00 this day belonged to the bulls as the index crawled back relentlessly to close at the highs of the day, back into positive territory.
You know, at some point you throw up your arms and give up. At every time in the last 20 years the market has responded with a pullback under these circumstances. But this time, blame it on manipulation or the inflow of free government money or whatever you wish, this time pullbacks last an hour rather than multi-day. Signs of weakness are abundant but they are used as buy signals rather than sell signals. Today should have been a trend day down but instead we saw buyers fill the gap. This has happened every time we've gapped down since February 5th. Betting against this bull is dangerous to your financial well-being.
SPX Summary for Thursday, April 22, 2010
339 Advancers/150 Decliners
Today's SPX component winners and losers:
• Largest one day loser is BAX with -13.27%
• Largest three day loser is BAX with -13.82%
• Largest five day loser is AKS with -14.94%
• Largest ten day loser is AKS with -19.75%
• Largest one day winner is SNDK with 12.21%
• Largest three day winner is HBAN with 26.05%
• Largest five day winner is HBAN with 20.35%
• Largest ten day winner is ZION with 23.54%
*** SPX Technical Summary ***
The lowest 14 day RSI component is MRK; the highest 14 day RSI component is BDK. The average 14 day RSI of all 500 components is 61.
The greatest positive five day momentum component is HBAN; the greatest negative five day momentum component is AKS. The average five day momentum of all 500 components is 0.73.
52.40% of the SPX components are giving a crossover Buy signal; 15.00% of the SPX components are giving a Sell signal. This is a 3.5 to 1 ratio of Buy signals over Sell signals.
SPX component signal changes today (evidence of trend):
• From Sell to Neutral: 7 components.
• From Buy to Neutral: 40 components.
• From Neutral to Sell: 7 components.
• From Neutral to Buy: 24 components.
The moving averages:
Close 1208.67
9 EMA 1206.04 Falling
5 DMA 1202.29 Falling
10 DMA 1202.19 Rising
20 DMA 1189.70 Rising
50 DMA 1151.81 Rising
100 DMA 1130.96 Rising
200 DMA 1081.44 Rising
10 Wk MA 1160.29 Rising
NYSE Summary
On the NYSE 3201 issues were traded with 2036 advancing issues and 1065 retreating issues, a ratio of 1.91 to 1 advancing. There were 451 new highs and 11 new lows.
Advancing volume was higher at a ratio of 1.46 to 1. The closing TRIN was 1.31 and the final tick was 555.
Evidence of trend:
Relative to the previous 30 session average, volume was 17.27% above the average. Of the last 15 sessions 9 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 24 sessions ended on a positive tick, 8 of last 10.
The 5 day moving average of New Highs is 361 while the 5 day moving average of new lows is 9 and the 10 day moving average of Net Advancing is 427. The Net Advancing data indicates a bullish trend.
Remember: Breadth leads, indices follow. Today, the NYSE Advance/Decline line increased from 209934 to 210905. This 0.46% increase came while the SPX was gaining 0.23%. The 10 day moving ratio of positive volume is 1.09 and the 10 day moving Advance/Decline ratio is 1.32. The 10 day moving ratio of positive volume has trended 0.01 over the last three days and the 10 day moving Advance/Decline ratio has trended 0.17 over the last three days.
The NYSE Composite Index lost -0.02% today.
NYSE Statistics:
Absolute Breadth Index: 26.60 up from previous day of 22.56
Cumulative Volume Index: 81,734.05 up from previous day of 80,473.78
High Low Logic Index: 0.65 up from previous day of 0.62
McClellan Oscillator: 24.49 up from previous day of (7.43)
McClellan 10 DMA: 10.78 up from previous day of 7.98
McClellan Summation Index: 3,522.33 up from previous day of 3,497.84
% Stocks Above 200 DMA: 87.01 down from previous day of 87.33
% Stocks Above 40 DMA: 79.44 down from previous day of 79.83
New High / New Low Ratio: 95.52 down from previous day of 95.59
26wk New High/Low Ratio: 94.37 down from previous day of 95.12
13wk New High/Low Ratio: 93.00 down from previous day of 94.53
4wk New High/Low Ratio: 78.94 down from previous day of 86.04
Cumulative 4-Week New Hi-Low: 443,869 up from previous day of 443,288
Nasdaq Adv/Decline: 1,808 up from previous day of 1,783
Russell 1000 Advance/ Decline Line: 2,775 up from previous day of 2,730
Russell 2000 Advance/ Decline Line: (1,496) up from previous day of (1,535)
Notes:
Absolute Breadth Index: Low numbers suggest a topping process and high numbers suggest a bottoming process.
Cumulative Volume Index: If this begins to trend down while the averages are trending up, it is a bearish sign. If this begins to trend up while the averages are trending down, it is a bullish sign.
High Low Logic Index: High readings are bearish; low readings are bullish.
McClellan Oscillator: -100 is oversold and +100 is overbought. Also watch for crosses above and below zero.
McClellan Summation Index: Interpreted as bullish or bearish when it crosses over the zero line.
Cumulative 4-Week New Hi-Low: The difference between the number of issues reaching new highs (during a 4-week period) and the number of issues reaching new lows (during the same 4-week period).
Friday, April 23
Economics
08:30 Durable Orders 0.0% cons.
08:30 Durable Orders ex-auto 0.8% cons.
10:00 New Home Sales 320k
02:45 France Consumer Manufactured Goods
04:00 Germany ifo Survery
04:00 Italy Retail Sales
04:30 Great Britain GDP
07:00 Canada CPI
Earnings
Before: CMS, DOV, EXC, FLIR, HON, IR, ERIC, PCX, COL, SLB, TROW, TRV, WLF, XRX
March durable goods orders are due before the open from the Commerce Department. Orders are expected to have risen 0.2% after rising 0.9% in February. Goods excluding autos are expected to have risen 0.6% after rising 1.4% in February. The government's new home sales report is due out after the start of trading. Sales are expected to have risen to a 325,000 unit annual rate in March from a 308,000 unit annualized rate in February. February's level was the lowest on record since the government began keeping tallies in 1963 and the fourth straight month of declines. Federal Reserve Governor Donald Kohn is due to speak Friday.
Mel’s Missives from the Matrix:
• Total tick for the day was 356,000. There were 227 ticks greater than 600 and 10 ticks more extreme than -600. There were 22 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.
• The day's range was 20.08 points. The 5 DMA of daily range is 13.99.
• Evidence of the intraday trend: At 10am volume was 114.27% of the 10 day average. By noon the volume was 104.62% of the 10 day average, and by 2pm volume was 108.83% of the 10 day average.
• The day's volume was 120.3% of the average daily volume for the last year. Volume was 110.3% of the last 10 day average and 101.1% of the previous day’s volume.
• Evidence of the intraday trend: The largest increase in relative volume came between 10:15 and 10:30 when relative volume increased 131.7% while the SPX was rising 0.27%. The largest drop in relative volume came between 10:00 and 10:15 when relative volume dropped -86.1% while the SPX was rising 0.03%.
• 33% of the SPX stocks closed with two day RSI above 90. 52% closed with RSI above 80. 9% closed with RSI below 20 and 3% closed with RSI below 10.
• 74.4% of the SPX are above their five day moving average, 71% are above their 10 day average, 77.8% are above their 20 day moving average, 85.6% are above their 50 day moving average, and 86.2% are above their 100 day moving average.
• 46% of the SPX closed above their most recent previous high.
• 8% of the SPX stocks closed below their most recent previous lows.
• 339 SPX issues advanced and 150 issues declined, a net SPX advance/decline of 189.
• Evidence of the intraday trend: At 10am, 48.4% of the SPX components were in the top half of the range. By noon, 63.8% were in the top half of the range, and by 2pm, 85.4% were in the top half of the range.
• 88.6% of stocks closed in the top half of the day's range. (11.2% closed in bottom half.)
• 47% of stocks closed in the top 10% of the day's range. 72.8% of stocks closed in the top 20% of the day's range.
• 0.8% of stocks closed in the bottom 10% of the day's range. 1.4% of stocks closed in the bottom 20% of the day's range.
• 44.4% of stocks closed within 2% of their 52 week high. 66.8% of stocks closed within 5% of their 52 week high.
• 37.2% of stocks closed within 50% of their 52 week low. 10% of stocks closed within 25% of their 52 week low.
• 41.4% of stocks closed within ¼% of their high for the day.
• 0.8% of stocks closed within ¼% of their low for the day.
• Evidence of the intraday trend: At 10am, 16.4% of the SPX components were up since the open. By noon, 30% were up since the open, and by 2pm, 57% were up since the open.
• 67.4% of the SPX closed up from the previous close; 83.6% closed higher than the open.
• Sectors stronger than the SPX for Thursday:
- Basic Materials -- Outperformed the SPX by +60%.
- Financials -- Outperformed the SPX by +35%.
- Industrials -- Outperformed the SPX by +63%.
- Technology -- Outperformed the SPX by +12%.
- Utilities -- Outperformed the SPX by +20%.
- Consumer Discretionary -- Outperformed the SPX by +167%.
• Sectors weaker than the SPX for Thursday:
- Energy -- Underperformed the SPX by -0%.
- Consumer Staples -- Underperformed the SPX by -17%.
- Health Care -- Underperformed the SPX by -129%.
• The $SOX index strength was stronger relative to the SPX Thursday by 1.81%.
• The XLF outperformed the SPX by 0.35% Thursday.
• The 2 Day RSI of the SPX is 97. The Dow RSI is 99, the NASDAQ is 99 and the Russell is 99.
• Over the last four sessions, the average session closed 83.3% of the range above the low. Thursday closed at 92.5% of the daily range.
• Upside momentum increased Thursday, from Wednesday’s -0.05 to today’s 0.73. The ratio of SPX components giving a crossover buy signal compared to sell signals decreased to B 3.49 to 1.
• The ISEE Equity 10 day moving average Thursday was 237.7. The lowest 10 day average in the last 52 weeks was 141.5 on 06/29/09 and the highest 10 day average in the last 52 weeks was 249.3 on 04/15/10.
• 131 SPX components moved upward and 247 components downward during the after hours with 258 million shares traded. This was extremely heavy after hours volume.
Trade 'em well on Friday everyone!
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"Mel"
